Blockchain and FinTech play a central part in the digital revolution that shakes the world of banks, insurance companies, and more financial markets in general, therefore it is the reason why a new arrangement will allow the revision of the positive law to empower the issuance and the conduction of certain non-admitted financial securities to the operations of a central securities custodian by using this platform.

Blockchain and FinTech play a central part in the digital revolution that shakes the world of banks, insurance companies, and more financial markets in general. Therefore, it is the reason why a new arrangement will allow the revision of the positive law to empower the issuance and the conduction of certain non-admitted financial securities to the operations of a central securities custodian by using this platform.

To grasp the extent of the FinTech and blockchain revolution, it’s essential to recognize the rapid advancement of hi-tech innovation. This includes a growing emphasis on improved connectivity with related factors such as regulations and their enforcement, shifts in banking practices, and heightened competition from agile FinTech start-ups. These startups leverage their swiftness to exert a significant influence on the conventional financial sector.

In the blockchain system, if a majority of participants, referred to as “minors,” reach a consensus on a transaction’s validity, it is then officially approved, time-stamped, and recorded in the shared ledger. Subsequently, a new block is added to the blockchain in a chronological and irrevocable manner. Despite its departure from the existing model, this approach encounters certain drawbacks, notably in terms of speed and cost. The substantial computing power required for transaction verification limits its widespread adoption.

This transformative practice has gained traction since the 2008 financial crisis, affecting both securities and cash systems. A significant challenge identified early in blockchain development is the resource-intensive nature of the current banking system targeted for improvement. This system demands extensive technical resources and involves a large number of individuals on each side of transactions, including institutions playing roles as lenders and borrowers.

The key driver for introducing change is the principle of openness, primarily facilitated through the utilization of blockchain technology. A pivotal aspect of this shift is the regular revaluation of collateral at standard intervals, such as daily or every few hours. This aligns with the market price of the security, providing transparency and efficiency in managing contracts and open positions associated with it.

Given that the period without any constructive action has lasted too long, there is a strong determination among Bitcoin enthusiasts to take charge and promote a new supplement to the blockchain world. This new version competes with the original and proposes an irreversible adjustment of the rules governing Bitcoin’s software. The aim is to enhance network control and facilitate more transactions. Enthusiasts are particularly focused on integrating Bitcoin with other fiat currencies, employing more influential and consensus-based schemes that rely on a certain level of trust among participants.

As blockchain usage raises fewer authorities or security concerns, it’s not surprising that this technology is being considered to advance existing solutions. To cope with fluctuations and the potential fractional return of securities, a margin call is contemplated between the two parties. Each party conducts its own assessment, comparing it with their counterparts. The use of blockchain in the financial sector could fundamentally revolutionize the situation by reducing the complexity of reconciliation processes.

This platform aims to simplify the process by performing a single computation and presenting a harmonized representation to stakeholders, eliminating discrepancies in theory. For this transformation to occur, a majority of mining instruments must align, corresponding to three-quarters of the computing power of the network for two weeks. This demonstrates that the users are reliant on its volatility, emphasizing that the conversion rate of regular money into Bitcoin may differ from when converting Bitcoin into regular money.

This does not imply the necessity of a Bitcoin address to send money, as an email or phone number is sufficient. If the beneficiary lacks a digital wallet in supported currencies, they will receive Bitcoins that can be exchanged on other platforms. Depending on the success of this overhaul and how quickly Bitcoin evolves, the registers where transactions are recorded will develop, and their confrontations will be observed.

We’ve seen how this plays out with Ethereum, which indirectly benefits from Bitcoin’s slowdowns. Regarding the relationship between blockchain and Ethereum, it has increased as an experimental platform involving certain types of smart contracts. These contracts act as self-ruling processor code evolving in the database, fulfilling exchange requirements if specific conditions are met.

Cryptocurrencies have primarily benefited from the enthusiasm, passion, and trust within the global Bitcoin community. Many enthusiasts believe this type of transaction represents the future of money, anticipating it will eventually replace traditional currencies, although not in the short term. Regulation will depend on how willing authorities are to adapt the framework for services offering these transactions. Restrictions in electronic payments related to gambling are expected, with the right to replace or cancel transactions without warning and adjust time limits for exchange and withdrawal.

The new system could support major cryptocurrency mining companies, leading to the absorption and centralization of this movement into an oligopoly. This divergence highlights the opposition between mining businesses and the group responsible for improving the Bitcoin network, bringing together crucial resources.

Blockchain is a technology for immediate data synchronization, and transaction realization involves tests to authenticate specific conditions and ensure compliance with regulations. However, expecting this technology to transform the payment industry in the next few years is overly optimistic. The current technological usage is not tailored for the performance of mass payment resources requiring quick responses, as with payment cards.

The formation of a private blockchain, shared with smart contract tools, appears to be the ultimate solution to optimize reconciliation procedures between financial institutions while remaining visible to regulatory bodies. In any transaction services, this is expected to facilitate the automatic transmission of verified information, automate confirmation procedures, and ensure regulatory compliance.

This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018